Update: On February 26th, NFIB will Key Vote in opposition to the $15 federal minimum wage. Read here.
On February 1 in a letter to the U.S. House and a letter to the U.S. Senate, NFIB urged Congress not to saddle small business owners with the Raise the Wage Act of 2021. Especially not now at a time when small businesses are confronted with the worst pandemic in more than 100 years and one-in-four (25%) small business owners report that they will have to close their doors if current economic conditions do not improve. Read NFIB’s Minimum Wage Infographic here.
The Raise the Wage Act of 2021, increases the federal minimum wage $15.00 per hour within 4 years and annually increases the federal minimum wage in subsequent years. NFIB opposes H.R. 603 and S. 53, the Raise the Wage Act of 2021 for the 117th Congress.
Small business owners know that more than doubling the federal minimum wage will lead to increased labor costs and tough choices. They must either increase the cost of their product or service – which in many cases is not feasible – or reduce labor costs elsewhere. The reduction in labor costs would be achieved through reduced jobs, reduced hours, or reduced benefits. None of these changes benefit employees.
NFIB opposes the Raise the Wage Act of 2021 because 92 percent of NFIB members opposed its mandates. NFIB urges small business owners to contact your Members of Congress today to oppose the Raise the Wage Act.
The NFIB Research Center’s 2019 study of this issue, “Economic Effects of Enacting the Raise the Wage Act on Small Businesses and the U.S. Economy,” found the following:
National Landscape: According to the NFIB Research Center’s 2019 economic forecast, the Raise the Wage Act would lead to massive output loss, job loss, and income reduction on a national scale.
- The cumulative real output loss would exceed $2.0 trillion with cumulative real GDP loss exceeding $980 billion over the ten-year forecast window.
- If the bill becomes law, there would be more than 1.6 million fewer jobs in the United States in 2029.
- Americans will have $103 billion less in disposable personal income in 2029.
- The act would reduce the number of able-bodied individuals participating in the labor force by more than 615,000 individuals in 2029.
Small Business Landscape: Small businesses would be particularly hurt by the Raise the Wage Act.
- More than 900,000 jobs lost, or 57 percent of all private sector job losses, would be at companies with fewer than 500 employees.
- Nearly 700,000 jobs lost, about 43 percent of all jobs lost, would be at businesses with fewer than 100 employees.
- The negative impact of the proposed legislation would fall disproportionately on small employers, which are less likely to have the cash reserves or profit margins to absorb the increase in labor costs than larger businesses.
Industry-Specific Landscape: The employment reduction in retail, food service, and administrative support account for nearly one quarter of lost jobs.
- The retail trade industry is forecast to have more than 162,000 fewer jobs by 2029.
- Food services and drinking places would have more than 165,000 fewer jobs by 2029.
- Administrative and support services would see a decline of more than 85,000 jobs by 2029.
- The forecast reduction in employment of the three industries combined is more than 392,000 lost jobs by 2029, approximately 24 percent of total forecast jobs lost.
